Housing Bargains, at a Price

In California’s most remote corner, the air is crisp, the sweeping plains and towering peaks inspire awe, and the median home price just crested $100,000 for the first time.

Yes, you read it right.

Modoc is California’s only county where the median price of a home has stayed so low for so long. It is the least expensive nook in one of America’s priciest states, a place where home buyers live out the pluses -- and many of the minuses -- of that elusive concept, “affordability.”

In Los Angeles County, $100,000 will just about cover the traditional 20% down payment for a median-priced house -- certainly not the whole building, yard and garage. In Orange County, it’s about 80% of a down payment, and in Marin County, the most expensive housing market in the state, it’s less than two-thirds of what’s needed.

Compare that to the county seat of rural Modoc, where a snug blue house on downtown’s Court Street -- complete with two bedrooms and a bath -- was recently listed at $84,000, and one unimpressed local real estate agent complained that it was overpriced.

But even in Modoc County, the self-proclaimed “last best place” -- closer to Boise than San Francisco, with more slogans (four) than people per square mile (two) -- the median home price is rising fast.

In 2000, the U.S. Census Bureau ranked the Modoc median price at $69,100. By the third quarter of 2005, the median -- the price at which half of all homes sell for more and half for less -- had jumped 40% to $96,500, according to DataQuick Information Systems, a research firm that tracks property transactions. Preliminary figures indicate that the median home price was about $116,000 for the last three months of the year.

Statewide, the median is estimated at $458,000 for the same period.

“We’ve had a red-hot market here too,” said real estate broker Dean Neer, who describes the region his family moved to in 1873 as a “buckaroo county.”

Affordability used to be a tangible concept that allowed the real estate industry to predict what buyers would do. That was back when mortgage companies required big down payments and wouldn’t allow households to spend more than 35% of buyers’ take-home pay to cover monthly housing costs. It was before low interest rates, soaring home prices and creative financing.

But these days -- and especially in this place -- affordability has become a slippery concept.

“To me, affordability is being able to have a job and being able to pay for the house you live in with that job,” said Robert Nash, executive officer of the Superior California Economic Development District, a nonprofit agency that focuses on Shasta, Trinity, Siskiyou and Modoc counties.

“While you would call a $120,000, three-bedroom home in a nice neighborhood in Alturas an incredible bargain, it’s not a bargain. You couldn’t find a job to pay for it.”

It is hard to imagine that California’s real estate eccentricities would extend this far, to a remote outpost that barely feels like part of the Golden State. In fact, what is now Modoc County had its start as part of two other U.S. territories -- first Utah, then Nevada -- before hooking up with California in 1864.

Most people “aren’t going to be able to get up there very conveniently,” said Dan Ripke, director of the Center for Economic Development at Cal State Chico, who visits on a semi-regular basis. “If you have a private pilot’s license, it’s much closer.”

If you don’t, then you’re in for a long drive -- 6 1/2 hours from San Francisco whether you take Interstate 5, hang a right at Redding and twist your way up California Highway 299 through Ingot, Round Mountain and tiny Burney, or take Interstate 80 to Reno and head left. The first route is more scenic. Locals swear the second is faster. Both can get very dark and very lonely.

Tucked away in extreme northeast California, Modoc County is home to, well, almost no one. The elevation in the county seat of Alturas -- 4,366 feet -- is a larger number than the population of about 3,000.

The highways have two lanes. There are no traffic lights, except for one of the flashing red variety. You can’t rent a car or hire a taxi. No prison, no psychiatrist -- except for the one in Oregon, who visits twice a month.

Until the new Rite Aid opened in late October, there was only one pharmacy in nearly 4,000 square miles. Many here describe the unassuming box as a “marvel”; it has increased the availability of everything from hair color to Chardonnay. Modoc County’s single theater screens a first-run movie every week -- but only Friday and Saturday nights and Sunday afternoons.

What the restaurants lack in variety they more than make up for in serving size. One early morning mainstay for sportsmen and law enforcement, Bullock’s Donut Shop, often sells out of doughnut holes before the sun rises.

“This is a great place for people who want to get out and do ... chop their own wood, develop their own lot, build their own home, shovel their own snow,” said Chester Robertson, a rancher and economic development consultant who does just that. After all, he added, quoting one of the county slogans, “This is where the West still lives.”

Janie Erkiaga, a real estate agent and cattlewoman who describes herself alternately as the “Basque broker” and the “lady rancher,” acknowledges that “a lot of people couldn’t live here, it’s so remote.”

Not that she minds: “We don’t want people to come here, say ‘How pristine!’ and bring their city ways.”

On this bright day, Erkiaga wears a black cowboy hat and dark glasses to protect the eye she injured while repairing a barbed-wire fence on her ranch. She is conducting a tour in her extend-a-cab Ford pickup, pointing out available homes in Alturas, the biggest town for hundreds of miles.

It doesn’t take long. There are only 33 houses and 27 mobile homes for sale in greater Modoc County. Compare that to San Francisco, where 1,500 to 2,000 residences are on the market at any given time.

Local real estate salespeople wish there were more -- and so do local buyers.

Especially in the last year or so, agents have seen an increase in retirees selling big homes in urban California, buying places up here for cash and planning to live on what’s left.

They are willing and able to pay more than the locals, Erkiaga said, and prices have risen accordingly. What new construction there is comes a house at a time. There are lots of mobile homes and no subdivisions.

Two of Erkiaga’s clients, a retired couple from Central California, have just closed escrow on a $98,000 home in town, with three bedrooms, hardwood floors and a double lot. They’re waiting to sell their other place because they want to give it a year here and see how they fare.

It’s probably a good idea. Early morning temperatures the week before Thanksgiving hovered around 20 degrees Fahrenheit, and winter had yet to officially begin. Summers up here in the high desert are hot and dry, winters cold and snowy.

“If we end up with a good old Modoc winter, there just might be more houses on the market,” Erkiaga mused. “It would help. Inventory is down.... The young people and the locals are being priced out of the market.... I would like to take care of our own first.”

But that is becoming more difficult. The needs of longtime locals and the desires of newcomers are increasingly at odds: What’s a steal to one is off limits to the other.

One big problem in Modoc County is that salaries haven’t kept pace with home prices in the land Native Americans once called “the smiles of God.”

The last major lumber mills closed in the 1990s, taking most of the good jobs with them. Work, for those lucky enough to have it, is likely to be seasonal or extremely low-paying. Many of the 9,600 or so residents have two jobs so they can pay the bills, or at least live comfortably.

Where else would a real estate broker peddle cattle on the side, as Erkiaga and Neer both do?

“For any real estate interests, please explore our DEAN NEER MODOC REALTY page or call the office,” Neer’s website urges. “Any of our associates will be happy to help you.” Then, without skipping a beat, his site asks: “Interested in our Herefords?”

For longtime residents like Stephenie and Dustin Hill, rising prices make it difficult to find a home they can afford.

Dustin is 25 and installs flooring for a living. Stephenie, 24, is mostly a stay-at-home mom, although she has a part-time job providing in-home care for an elderly client. After three months of looking for a house they could afford, they came up empty-handed.

“Compared to anywhere else, it’s cheap,” Stephenie acknowledged recently, reminiscing about the home her father bought here for less than $20,000, when she was a girl. “I wish I could find a place for $50,000. That’d be a lot nicer. But if we have to spend $100,000, we’ll do it.”

Newcomers -- retirees, or the few urban transplants who bring work with them -- often don’t depend on the local economy for survival. David Cawthorn and his wife sold a home in Sonoma County earlier this year and brought their five children to Alturas, where their current mortgage is about half the size of the payment on their sport utility vehicle.

Cawthorn, a mortgage broker, works out of a home office. With an Internet connection, a phone and a fax machine, he says, “I can do loans anywhere in California.... Business is better than it ever has been.”

The Ruvalcaba family, formerly of Monterey County, practically founded their own colony. In less than four years, Francisco and Audelia Ruvalcaba, seven daughters, assorted sons-in-law and more than a dozen grandchildren have come here from the working-class towns of Marina and Salinas.

They scooped up something like nine houses and two apartment buildings and padded the sparse county by 35 or so people. At least that’s to the best of Grace Lopez’s recollection, and she’s the daughter who’s telling this story, her hand covering a broad smile as she recounts, giggling, a single-family population explosion and the real estate deals they still can’t believe: a three-bedroom house for $135,000! Four bedrooms for $128,000! A two-bedroom fixer-upper for $45,000!

Lopez is an accountant for the Modoc County Office of Education. Her husband, Javier, is a landscape contractor. In Marina, outside Monterey, they lived with their son, Oscar, now 7, in a mobile home they owned on land they rented.

Two years ago, the Lopezes sold that place for $85,000 and bought a double-wide on 20 acres just outside of Alturas for $52,000 in cash.

That left enough to buy a small building in town so Lopez could start a home accessories business. The store, called Gracy’s, opened the Saturday before Thanksgiving.

“We left behind frustration, anxiety,” said Lopez, 40. “That’s what you get down there. You work the same as here, but it takes you an hour and 15 minutes to get to your job and a little more to get back.... I came here and bought in cash and then had extra.

“You think I wasn’t going to move?”

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(BEGIN TEXT OF INFOBOX)

Home, cheap home

Modoc is the last county in California to crest the $100,000 median home price.

Top 10 least expensive counties:

(third quarter 2005)

*--* 1. Modoc* $116,000 2. Del Norte 169,000 3. Lassen 188,500 4. Trinity 191,000 5. Siskiyou 218,500 6. Tulare 230,000 7. Glenn 230,750 8. Plumas 234,250 9. Imperial** 234,750 10. Tehama 235,545

*--*

Top 10 most expensive counties:

(third quarter 2005)

*--* 1. Marin $815,000 2. San Mateo 765,000 3. San Francisco 750,000 4. Santa Cruz 699,000 5. Santa Clara 660,000 6. Monterey 610,000 7. Orange 605,000 8. Ventura 604,000 9. Napa 602,500 10. San Benito 598,000

*--*

*Preliminary fourth quarter

** Imperial County data is for June 2005; complete information is not available.

Source: DataQuick Information Systems